SATELLITE SMACKDOWN: Turnbull vs. Quigley

At about 3:30 PM yesterday, during a Public Hearing of the Joint Committee on the National Broadband Network, several NBNCo staffers suddenly became quite agitated.

They passed an iPhone among themselves, before handing it to NBNCo CEO Mike Quigley, who quickly reddened and broke verbal stride to read aloud the following Tweet

“Quigley & Gvt happy to take risk of building and launching $660 million satellites without having the orbital slot allocated.”

The source of the Tweet was Shadow Communications Minister Malcolm Turnbull and Quigley rounded on him, telling the Hearing (which records its proceedings in Hansard) that the Tweet contradicted what he had said minutes earlier. Committee Chair Rob Oakeshott (who's a lot bigger than he looks on television) noted that another Committee Member (Ed Husic) had already taken to Twitter to refute Turnbull, labelling his Tweet a “nice verbal job”.

The Twittersphere branch of the argument followed a tense session at the Hearing, where Turnbull opened a new front in the coalition's attack on the NBN by quizzing Quigley on the satellites and technology chosen to serve remote users, plus the decision-making process that went into the satellite purchase plan.

Turnbull had warmed up earlier in the day by quizzing Telstra about the cost of installing NBN connections in homes. During those questions the room in which the Hearing took place quietened in anticipation of a difficult time for witnesses. Turnbull went in hard, but did not deliver – or attempt – a killer blow as he pursued Telstra over the true cost to homeowners of an NBN connection. NBN opponents have tried this argument before and it seemed odd that Turnbull did not try to make more of the fact that Telstra sends two people and schedules five hours to wire homes to its South Brisbane optical network.

That left observers feeling that perhaps Turnbull had bigger fish to fry, so the room hushed again as the MP's turn to question the CEO arrived.

An NBNCo staffer even turned to your correspondent and said “this will be interesting” as Turnbull's microphone was switched on.

Here's what happened next.

Turnbull opened by tripping Quigley up on the number of households expected to take up NBNCo's satellite service. Quigley said 200,000. Turnbull asked why NBNCo's Corporate Plan says 106,000. Quigley said he thought it was actually 160,000, before Turnbull won a point by quoting the exact page of the Corporate Plan on which the 106,000 figure appears.

Quigley wasn't going to be cornered easily, however, and swiftly responded that further analysis of wireless footprint led NBNCo to believe that the takeup rate would be higher than first thought. Customer feedback had also meant changed assumptions.

Turnbull let that one through to the 'keeper, before responding with a rambling question about two satellites. Viasat 1, he said will be able beam the Internet to one million US households at 12 Mbps. Another satellite, he said, naming Hughes' Jupiter, can bring broadband at 5 Mbps to two million people and can even deliver broadband at 20Mbps.

The existence of such satellites, Turnbull said, surely means NBNCo is indulging in wasteful overbuild by insisting on two satellites for just 200,000 people.

Quigley won this round swiftly and decisively, pointing out that NBNCo's satellites will deliver guaranteed access speeds to each and every subscriber, all the time. Other satellites are notorious for scrimping on bandwidth to each subscriber, he said, and that's something NBNCo won't countenance.

Turnbull suggested satellite operators may be disingenuous and Quigley agreed, saying that if every subscriber consumed the headline rates of bandwidth, the satellites Turnbull mentioned would crash. Coverage-wise, that is.

Next came Turnbull's main thrust: a question regarding a satellite operator that went bankrupt after failing to secure orbits in which its birds would circulate. Might NBNCo not strike similar problems, he asked, if it has not secured orbits of its own.

Quigley said NBNCo has filled in all the right forms to secure orbits, has started the approval process and expects everything to fall into place before launch. All the right people know about NBNCo's satellites and none have raised objections.

Turnbull wasn't satisfied by this assertion that the all the cool kids in the Asian satellite gang think Quigley's birds are great. He suggested that colossal risk flows from not having an orbit and attendant details like frequencies for ground stations sorted out long before even considering who should build a satellite.

Which is where Quigley got into trouble, by saying that it is not unprecedented for satellites to launch without all of those details being sorted out, but added that he's not going to lose any sleep over the prospect. Launch failure is far more worrisome.

Turnbull used that admission to paint a picture of NBNCo's satellites as risky rogues clogging the spaceways. Try as Quigley might to explain that it makes sense to order satellites in advance, in order to speed up the project, Turnbull refused to budge from his position that doing any work on the project without every “i” dotted and every “t”crossed represents risk and potential waste of the taxpayer's dollar.

He then turned to the cost of NBNCo's satellites which, at $AUD660m for the pair, he felt may be a little on the pricey side given the two craft he mentioned earlier cost a little less than $700million. Surely Australia deserves a bulk purchase discount?

Quigley was back on form with this one, pointing out that NBNCo's birds have 101 “spot beams” apiece, the better to target remote communities. Spot beams, he intimidated, don't come cheap.

At this point Turnbull's Parliamentary colleague and former Optus executive Paul Fletcher took up the cudgels, pursuing a line of questions about whether NBNCo really needs to launch and operate two satellites. Quigley's defence of redundancy, plus admission NBNCo had considered staggering the launch by years, went down well.

Fletcher then returned to Turnbull's line of questioning, once again asking if it was sensible to launch anything without paperwork in quadruplicate, signed in the blood of every Cabinet member.

Quigley suggested that Fletcher would surely recall Optus behaving just as NBNCo has done when buying satellites, a retort that saw Fletcher issue a gruff reminder of just who gets to ask the questions in Pubic Hearings of a Parliamentary Committee.

“Jawhol, Sergeant Schulz” was the best possible response to Fletcher's blunt reminder. Quigley took the more sensible option of a straight answer.

The Hearing then drifted off into less interesting matters, as the debate hit the Twittersphere.

Turnbull has since softened his position to “should we be concerned?” about lack of orbits. Comments on that post are mixed in their assessment of whether or not concern is warranted, but it seems sensible to brace for more attacks on the NBN ... from Spaaaaaaaace. ®